What is Mortgage Insurance?

Private mortgage insurance (PMI) policies are designed to reimburse a mortgage lender up to a certain amount
if you default on your loan. Most lenders require PMI on loans where the borrower makes a down payment of less
than 20%. Premiums are usually paid monthly or can be financed. With the exception of some government and older
loans, you may be able to drop the mortgage insurance once your equity in the house reaches 20% and you’ve
made timely mortgage payments. The Servicing Lender will have the requirements for canceling the mortgage insurance.

What is Mortgage Insurance?

Private mortgage insurance (PMI) policies are designed to reimburse a mortgage lender up to a certain amount
if you default on your loan. Most lenders require PMI on loans where the borrower makes a down payment of less
than 20%. Premiums are usually paid monthly or can be financed. With the exception of some government and older
loans, you may be able to drop the mortgage insurance once your equity in the house reaches 20% and you’ve
made timely mortgage payments. The Servicing Lender will have the requirements for canceling the mortgage insurance.

What is an FHA 203K Loan?

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Basically, it’s an FHA loan to purchase or refinance your home with additional funds for your home improvements. FHA which stands for Federal Housing Administration (FHA) is a mortgage insurance and is part of the Department of Housing and Urban Development (HUD). HUD or FHA do not make direct loans to consumers (homebuyers or homeowners) but FHA does insure loans that are funded by approved FHA lenders. FHA insures different types of home loans which one of them is the 203k that is used to rehab properties. The more popular version though is the FHA 203b which does not include funds for rehabilitation.



The Process of the 203k Loan

Find the home you’ll want to purchase and determine what improvements need to be made to the property. The purchase contract offer is written the same as any other, accept you’ll want to make sure that there is language stating the purchase is contingent upon borrower acquiring an FHA 203k Loan.

In order to complete the financing of the improvements, you will need to meet with a contractor to determine what kind of work you are planning and how much it will cost. The contractor will give you a bid, which you’ll need to pass on to the lender. The lender will order an appraisal to determine what the value of the house will be once all of this work is completed. Keep in mind, you’ll also need to be qualified for the full loan amount which is based on the purchase price plus the additional cost of repairs. Once the loan is approved, you will go to closing like you normally would. The amount that will be needed to do all of these repairs or improvements will be placed into an escrow account held by the lender. As the work is being completed, there will be draws from the account to pay the contractor.



Type of work for Streamlined 203(k):

  • Roof repair, gutters, downspouts
  • Existing HVAC systems
  • Plumbing and electrical systems
  • Flooring, Painting, Appliances, Weatherization
  • Repair, replace or add exterior decks, patios, porches

What does the Contractor you select need to do?

  • Provide written work plan and cost estimates
  • Must include nature and type of repair and the cost of completion
  • Must be licensed and bonded for each specialized repair
  • Must agree in writing to complete the work for the amount of the cost estimate and within the allowed time

TBD APPROVALS

TBD Approvals

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Wright Mortgage offers an innovative new loan program to homebuyers – before they find their home!

We can complete the loan process – actually approving your buyer – without an identified property.

With TBD Approvals, buyers have the confidence that they have already been approved for their mortgage which means their buying power is improved:

  • Sellers know the loan process has been completed so there is no worry that the sale won’t close.

  • Buyers can negotiate a good purchase price because they know they can close quicker than with a traditional loan process and they can offer the seller an assured closing

 

How does it work?

  • The buyer completes a mortgage loan application with Wright Mortgage, providing us with all of the information needed for a mortgage loan – except for the address!

  • We process the loan and, upon approval, we’re ready to close once the property is identified.

 

Who is eligible for this program?

  • Those mortgage loan borrowers who have challenged credit or very high debt to income ratios.

  • Your clients are available for both FHA insured mortgage loans and Conventional mortgage loans, people who have excellent credit or people who is below 640 credit score and consider below average credit.

  • Qualify more borrowers with credit challenges to achieve the American Dream.



* Enjoy the peace of mind REALTORS of driving your clients around town with the mortgage loan already approved!

“FAMILY OWNED* LOCALLY OPERATED* WE CLOSE THE WRIGHT LOANS”

New FHA Down Payment Program

New FHA Down Payment Program

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The down payment program is a great program if you need funds for down payment for that new home. If you qualify for the program, you will be eligible to receive funds to cover a portion of your required down payment amount. The maximum amount of funds you can receive under the program is 2% of the purchase price of the home being purchased; you will still be required to pay any remaining amount of the required down payment yourself or with a gift from a family member.

  • One program used for all types of borrowers, with the same qualifications
  • Completely forgivable grant, equals 2% of purchase price
  • May be combined with up to 6% seller concession for closing costs
  • No resale or borrower repayment restrictions
  • No underwriting fee

 

For example, if you are purchasing a home with a purchase price of $150,000, the maximum amount of down payment assistance you can receive under the program is 2% of $150,000, or $3,000. If the required down payment amount is $5,250 (3.5% of $150,000), you would still be required to fund $2,250 yourself, or from a gift from a family membe

FHA Limited 203(k) Rehabilitation Mortgage

FHA Limited 203(k) Rehabilitation Mortgage
Help Your Clients Add Enjoyment and Value to Their Home with Upgrades or Remodeling
Some buyers shy away from older homes, properties that are outdated, or houses in need of repairs. In the 2015 report on Home Buyer and Seller Generational Trends from the National Association of REALTORS® the following reasons were given by home buyers when asked why they chose to purchase new homes:

·     40% wanted to avoid renovations or problems with plumbing or electricity

·     24% preferred the ability to choose and customize design features

·     10% saw a lack of inventory of previously owned homes

Contrast this to the top reasons given by buyers of previously owned homes:

·     32% listed “better price”

·     32% indicated “better overall value”

How many of your clients are aware that the FHA Limited 203(k) Rehabilitation Mortgage could open up the best of both worlds?

Program Highlights
·     All-in-one loan used for minor non-structural repairs

·     There is no minimum requirement for repair costs

·     Can be combined with the FHA Good Neighbor Next Door (GNND) program

·     Max completion time: 90 days – IMPROVE Instead of Move!